Gold News: Investors Awaiting Federal Reserve Policy

Gold News

In the latest gold news: As of February 26 at approximately 12:45pm EST, gold was trading at $1330.51 per ounce, dipping slightly after higher prices last week. At approximately this time last week, gold was trading at $1348.28 per ounce.

Last week, gold had a slight spike due to the decreasing dollar and problems in the market with confidence in the US market. However, after a muted Friday session, gold is now kicking off the week slightly lower, close to the $1330 region. The bullion is still testing the bottom of its recent decline, its most recent pullback, and is still heavily dependent on the market sentiment amidst buyers and sellers. The lack of growth in the yellow metal has been partially due to yields on US Treasuries climbing to multi-year highs and the market regaining some of its confidence in the US dollar after coming to grips with the possibility of rising inflation. Historically, gold has been attempting to push for the handle of $1400 for a while, after dropping off this price in 2013. The bullion has had resistance along the way, recovering from a multi-year low beneath $1050. Currently, gold will need to break and hold the key level of $1360; however, there are many barriers along the way and it is debatable whether this will happen soon.

The key to much of gold’s price movement will depend on the new chair of the Federal Reserve. Jerome H. Powell’s response to the market and handling of the chaotic US stocks will be key in letting investors know how the Fed will react in the next few years. Traders are ready to analyze Powell’s semi-annual testimony on Tuesday in order to find clues as to the upcoming pace of the US monetary tightening. That being said, most analysts believe that the reactions coming from the Fed will be mostly the same as the previously established policy outlook set by Janet Yellen. Nomura analysts recently stated, “We expect Powell to signal policy continuity in the near term and acknowledge the near-term growth effects of fiscal policy and the longer-term deficit and debt implications […] Not coming from a monetary policy background, Powell may frame his arguments in a new way, which may generate surprises. That said, we do not expect him to intentionally signal a change in policy direction during his testimony”.

This sentiment has caused the bullion to reach up to its previous price points, at least for now. In the 14-day gold prediction ending January 02, I Know First’s algorithm based on a stock prediction algorithm showed an impressive 100% accuracy rate, as seen in “Gold Forecast Based on Algorithmic Trading: Returns up to 4.53% in 14 Days.” After a fortnight, I Know First’s average percent change came out to 4.53% with GLD as the top earner, bringing in an impressive 4.53% return to investors.